Does business leasing make sense?

A business lease seems to be buying on credit but without ownership as an absolute requirement. I loathe the idea of purchasing things on credit, but if it makes sense tax-wise then I would certainly do it.

Now I need a new laptop every 2-3 years, and I own as many computers as I want to own (3), so I'm considering a business lease as it *seems* on the surface to be a decent idea. I downloaded Dell's Buy or Lease pdf and I'm unclear whether it makes sense or not. Is it all based on the tax benefits?

If I were to purchase a computer outright, I thought that I would be able to write the whole thing off as an expense. It seems that may be possible with lease payments, so perhaps spending less money upfront is a better idea. Do I understand this right?

Thanks!

 

Unless you plan on turning over every 6 months to year and NEED a new machine that often I dont think the leasing is the best choice.

Dell is going to charge you more for leasing the laptop than if you actuall bought it - will that cost you more or less with the tax benefits?

 

I'm awaiting a response from my accountant on the tax issue - it seems to be between a lease as a business expense vs a 'capital investment' & depreciation. I myself (obv) don't know which might be better.

What kind of a business would turn over every 6 months?

 

It boils down to realizing your tax decrease in year 1 as X or in years 1, 2, 3 as X/3 each year. You would not depreciate a notebook purchase; depreciation is reserved for long time assets. Other things to consider are your investment opportunities, what would you lose by buying it in year one as opposed to investing the money and paying the lease. The lease is obviously going to have interest built it. Your accountant should go into all of these with you.

 

I think my tax liability may be low enough that spreading the write-off over time makes more sense. I'm still waiting to hear from my accountant before moving ahead.